Toyota to realign Japan manufacturing operations

By IBT Staff Reporter03/25/10 AT 10:03 AM

Toyota Motor Corp said on Thursday it is studying plans to reorganize its domestic manufacturing operations to consolidate production of similar vehicles regardless of brands across its group companies.

Toyota currently produces a single model at different factories in some cases.

Atsushi Niimi, Toyota's executive vice president in charge of production, told a group of reporters in Nagoya that closing some assembly lines was one possibility as part of the new efforts, according to a Toyota spokeswoman who confirmed his comments.

The move was first reported on Thursday by the Nikkei business daily, which said Toyota wants to shave 100 billion yen ($1.1 billion) off its annual production costs by 2012 by increasing the use of common parts among different models.

We want to decide by summer what order we'll (reorganize the operations), Niimi was quoted as saying. He added that he expected no job cuts if any assembly lines were closed, although staff may be shifted around within the group.

No final decision on the specifics of the realignment has been made yet, the spokeswoman said.

Niimi also said he expected domestic Japanese production to hover between 12,500 and 12,600 units a day for some time, about 1,000 units lower than the guidance Toyota gave to its suppliers for the three months from March to May at the end of February. In January, Toyota produced vehicles at a pace of about 15,000 units a day in Japan.

Niimi said the recall crisis was hurting sales in North America, while the impact was also appearing in Europe and China.

It's difficult to get a good read (on production levels) by looking at the current situation, he said, according to the spokeswoman. But we have to be prepared to work at this level.

Toyota makes vehicles in Japan at 17 plants, including four of its own and facilities operated by manufacturing units as well as Daihatsu Motor Co and Hino Motors Ltd.

By phasing in the reorganisation as new and updated models are introduced, Toyota aims to complete the transformation by the end of the decade, the Nikkei said.